Having lived through a dark period of grim economic news, unemployment, bank failures, and a meltdown of the auto industries, it is refreshing to see technology companies bucking the trend, gaining strong investment support. The Los Angeles website SoCalTech.com lists over 100 investments totaling over $300 million (only those with investment totals listed) just since June 1st. Those investments stretch from Santa Barbara to San Diego, covering investments ranging from biotech to telecommunications.
Hunter Newby, CEO and Founder of Allied Fiber, notes that “with the right idea, team, timing and audience anything can happen.” Allied Fiber is a start up telecom company addressing the lack of accessible dark fiber in the market by making carrier neutral dark fiber available to enterprises, carriers, and network providers.
“The global economic collapse actually helped me as it scared, or pushed away all of the inferior plans (weak team, model, or combination, etc). No one out looking to build anything in telecom today has the exact Allied Fiber model” continues Newby. “The investor community knows this as they see congestion in wireless backhaul, video over IP, etc with no real plan to solve the issues, so when they hear about Allied Fiber it is like finding the missing puzzle piece that fits right in.”
While the Dow Jones VentureSource reports Q2 of this year was “one of the worst” ever for venture capital backed firms, Southern California’s “Tech Coast” appears to be ignoring the trend. Companies such as Irvine’s online advertising and marketing company WebVisible announced that “it has thrived during the first half of 2009, even as the overall advertising industry struggles in the current economy.”
WebVisible is not alone, as SoCalTech’s daily headlines show a robust listing of investments, exits, partnerships, and acquisitions within the California tech industry. On May 19th Southern California’s Tech Coast Angels, a group of private investors dedicated to assisting startup companies in the SoCal region, announced they had reached a record $100 million in angel investments.
“The $100 million total represents funding, as well as mentoring, expertise and industry contacts, provided by TCA members over the last 12 years to more than 150 young California-based companies in a range of fields including life sciences, software, Internet, biotechnology, media, business services, and consumer products. TCA’s contributions to these companies subsequently helped attract more than $1 billion in additional capital.” Press Release – May 19, 2009
Hunter Newby, who has previous managing sales and strategy at both MCI/Worldcom and Telx, is well tuned to the needs of American telecom and enterprise companies, and knows the value of a well planned and prepared business case.
Newby explains “The global economic collapse actually helped me as it scared, or pushed away all of the inferior plans (weak team, model, or combination, etc). No one out looking to build anything in telecom today has the exact Allied Fiber model. It is a combination of unique elements that could only have existed and been brought together at this point in time. The investor community knows this as they see congestion in wireless backhaul, video over IP, etc with no real plan to solve the issues, so when they hear about Allied Fiber it is like finding the missing puzzle piece that fits right in.”
Southern California and New York (home of Allied Fiber) are not the only bright spots on the venture horizon. Oregon and Washington State are also showing signs of a great year for both investors and startup companies. The Portland BizJournal reported that at least one local venture capital firm is planning to put more than 10 times as much money into investments in 2009 as they did in 2008. The story also indicated that Silicon Valley firms having difficulty with funding are now considering a move to Oregon, as the Silicon Valley region’s VC firms and “early stage investors are tapped-out.”
Some people call our current economic situation a crisis. Others see it as a major opportunity. The big question is how prepared are you to take advantage of both business and investment opportunities. Now is the time to take stock of your own personal visions, goals, and actions.
Join a fast-pitch competition, test your business case and planning, take a shot at presenting your plan in a 30 second elevator pitch. Money is available to fund your ideas if you do your homework. You can either sit back and wait to see what happens in the current business world, and run the risk of becoming a victim of recession or economic downturn, or you can get out on the street like Newby and take control of your future. Show no fear in hitting your vision, and become part of the economic rally that will redefine our country.
John Savageau, Long Beach